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What are the main weaknesses of using demand-side policies?
Trade-off issues
a) Growth and low unemployment often come with inflation
b) Government stimulatory policies might be come from deficit spending and thus enhanced debt
c) Growth may result in current account problems (HL; use MPM)
d) Growth and inflation, together with rising imports may lead to downward pressure on the exchange rate
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Suppose that two wage regressions are estimated for native and white workers: Wn = 5.0 + 0.10S Ww = 6.0 + 0.14S Pick a reasonable average level of schooling for white and Native wo
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subsitution effect dominate tha income effect in which good case?
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the short run can be defined as any period of time
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